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Algorpal Industries produces high quality pneumatic filters. For years
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Updated on: 04 Mar 2019, 02:23

3

3

00:00

A

B

C

D

E

Difficulty:

35% (medium)

Question Stats:

75%(02:00) correct 25%(02:08) wrong based on 431 sessions

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Algorpal Industries produces high quality pneumatic filters. For years, they have primarily served manufacturers of domestic agricultural equipment, and over time, this market has been decreasing. A consultant recommended that, with a minor modification, Algorpal could expand into pneumatic filters for biomedical research technology, a rapidly expanding market. The consultant argued that this single change could reverse a ten-year decline in Algorpal’s profits.

Which of the following would be the most useful to establish in evaluating the consultant’s recommendation?

A. Whether other markets, such as food processing and food service, would offer greater opportunities for potential profits.

B. Whether the number of biomedical devices at any single research center is greater than the number of pieces of equipment requiring filters on a single farm.

C. How the ambient indoor air quality in a biomedical research center compares to the typical outdoor air quality in an agricultural zone.

D. Whether the competition in the biomedical technology sector would allow for profits similar to what those in the agricultural sector had been

E. Whether countries with expanding agricultural sectors would use farm equipment similarly to the domestic equipment current served by Algorpal.

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12 Aug 2015, 11:09

1

Quote:

Algorpal Industries produces high quality pneumatic filters. For years, they have primarily served manufacturers of domestic agricultural equipment, and over time, this market has been decreasing. A consultant recommended that, with a minor modification, Algorpal could expand into pneumatic filters for biomedical research technology, a rapidly expanding market. The consultant argued that this single change could reverse a ten-year decline in Algorpal’s profits.

Which of the following would be the most useful to establish in evaluating the consultant’s recommendation?

A. Whether other markets, such as food processing and food service, would offer greater opportunities for potential profits.

B. Whether the number of biomedical devices at any single research center is greater than the number of pieces of equipment requiring filters on a single farm.

C. How the ambient indoor air quality in a biomedical research center compares to the typical outdoor air quality in an agricultural zone.

D. Whether the competition in the biomedical technology sector would allow for profits similar to what those in the agricultural sector had been

E. Whether countries with expanding agricultural sectors would use farm equipment similarly to the domestic equipment current served by Algorpal.

A consultant recommendation:1. Algorpal could expand into pneumatic filters for biomedical research technology, a rapidly expanding market. 2. The consultant argued that this single change could reverse a ten-year decline in Algorpal’s profits.

Option A: Information related to other markets is completely out of scope.

Option B: Whether the number of biomedical devices is greater or less than the number of pieces of equipment requiring filters on a single farm is irrelevant to the profits as claimed by the consultant.

Option C: Same as of B. This can be true but Air quality will not give any info regarding the profits.

Option D: If there is a stiff competition then it may prove to be difficult to gain profits and if the competition is less compared to agricultural sector then firm may gain profits. This info is needed to evaluate the argument properly.

Option E: Info regarding other countries is completely out of scope and is not going explain anything.

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Algorpal Industries produces high quality pneumatic filters. For years, they have primarily served manufacturers of domestic agricultural equipment, and over time, this market has been decreasing. A consultant recommended that, with a minor modification, Algorpal could expand into pneumatic filters for biomedical research technology, a rapidly expanding market. The consultant argued that this single change could reverse a ten-year decline in Algorpal’s profits.

Which of the following would be the most useful to establish in evaluating the consultant’s recommendation?

A. Whether other markets, such as food processing and food service, would offer greater opportunities for potential profits.- Food processing and food service is not related here.

B. Whether the number of biomedical devices at any single research center is greater than the number of pieces of equipment requiring filters on a single farm.- not a related comparison. So this is incorrect.

C. How the ambient indoor air quality in a biomedical research center compares to the typical outdoor air quality in an agricultural zone.- air quality is irrelevant

D. Whether the competition in the biomedical technology sector would allow for profits similar to what those in the agricultural sector had been- This is surely one factor although not the only one that will actually help evaluate the consultant's recommendation. hence the best choice.

E. Whether countries with expanding agricultural sectors would use farm equipment similarly to the domestic equipment current served by Algorpal.- this does not support the consultants stand, so this is ruled out._________________

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04 Aug 2018, 00:23

1

Official Explanation

The core of the consultant's argument is: branching into this new sector will bring new profits, profits to replace what was lost in the agriculture sector. The credited answer is (D): whether branching into this new biomedical sector indeed will replace the former profits.

Choice (A) raises a different question, profits from a third sector not mentioned. This might offer yet another alternative, but it's not directly relevant to the question: will entering the biomedical sector replace former profits?

Choice (B) might appear to be relevant to the question of profits, but suppose we knew the precise answer to this --- suppose we knew, say, that each farm had five machines and each research center had three machines. Then what? How many farms overall are there? How many biomedical research centers overall are there? We don't know, so we can't evaluate the question of total profits.

Choice (C) is an interesting distractor. Whatever a pneumatic filter may filter, it probably has something to do with air. Are these filters filtering ambient air in the room, or are they filtering some particular internal channel within the machine? We don't know, and even if we did, we would still be a long way off from deciding anything about profits.

Choice (E), like Choice (A), offers another option, another avenue that Algorpal might decide to follow instead of, or in addition to, the consultant's recommendation. The task here, though, quite specifically, is to evaluate the consultant's recommendation. How successful another avenue would be tells us nothing about how successful the plan recommended by the consultant would be.
_________________

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04 Mar 2019, 02:07

I choose D because all other options are irrelevant. Please explain why D is correct?

In conclusion, the consultant tells that the decline in the profits could be reversed.i.e the profits will increase. But answer choice D question the profits? Why do we question about profitability when the author has told that the decline in profits will be reversed.